Sin­ga­pore’s GDP growth slows in se­cond quar­ter

Bangkok Post - - WORLD -

S in­ga­pore’s

eco­nomic growth eased in the se­cond quar­ter and missed fore­casts, pre­lim­i­nary data showed yes­ter­day, as man­u­fac­tur­ing ac­tiv­ity cooled and wors­en­ing US-China trade ten­sions clouded the out­look for the trade-re­liant city-state.

Gross do­mes­tic prod­uct grew 1.0% in the se­cond quar­ter from the pre­vi­ous three months on an an­nu­alised and sea­son­ally ad­justed ba­sis, the Min­istry of Trade and In­dus­try said, slower than the me­dian fore­cast of 1.2% in a Reuters poll of econ­o­mists and the down­wardly re­vised 1.5% growth in the first quar­ter.

“Over­all, the sense is that mo­men­tum is go­ing to con­tinue to slow, some of it from the high base last year, some of it be­cause elec­tron­ics seems to be ta­per­ing off a lit­tle bit,” said Se­lena Ling, OCBC Bank’s head of trea­sury re­search and strat­egy.

The econ­omy ex­panded 3.8% in AprilJune from a year ear­lier, ver­sus the me­dian fore­cast of a 4.0% ex­pan­sion in the poll, and de­cel­er­at­ing from the down­wardly re­vised 4.3% growth posted for Jan­uary-March.

Man­u­fac­tur­ing and ex­ports of elec­tron­ics were one of Sin­ga­pore’s main driv­ers of growth last year. How­ever, a de­cline in elec­tron­ics ship­ments for six con­sec­u­tive months has raised ques­tions about over­all de­mand in the sec­tor.

Still, OCBC’s Ling said the driv­ers of man­u­fac­tur­ing had broad­ened slightly, thanks to con­tri­bu­tion from the biomed­i­cal sec­tor, which was pos­i­tive.

Ear­lier this month, the Mon­e­tary Au­thor­ity of Sin­ga­pore warned risks to the global growth out­look have in­creased sig­nif­i­cantly thanks to the in­ten­si­fy­ing trade row and the ris­ing prospect of a rapid ac­cel­er­a­tion in in­fla­tion.

Sin­ga­pore is seen as a bell­wether for global growth be­cause in­ter­na­tional trade dwarfs its do­mes­tic econ­omy, equat­ing to about 200% of its GDP.

In May, the MTI had fore­cast full-year eco­nomic growth of 2.5 to 3.5%. GDP grew 3.6% rise in 2017, the fastest pace in three years.

“Go­ing for­ward, down­side risks to the econ­omy will in­volve sup­ply chain risks from U.S.-China trade tar­iffs,” said Jeff Ng, chief econ­o­mist, Asia, at Con­tin­uum Eco­nom­ics.

“Mean­while, prop­erty cool­ing mea­sures may also limit the up­side to Sin­ga­pore’s near-term do­mes­tic growth,” he added.

The city-state last week tough­ened curbs on the hous­ing mar­ket, in a sur­prise move.

In April, the cen­tral bank tight­ened mon­e­tary pol­icy for the first time in six years. An­a­lysts are split over whether the move is the start of a longer-term tight­en­ing cy­cle.

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